The merits of being either a private or public company dominated much of the discussion during the dry bulk panel at this week’s Maritime CEO Forum in Hong Kong. An all-star lineup of top dry bulk owners took to the stage, moderated by Mandarin Shipping’s Tim Huxley for a lively debate.
Mats Berglund, CEO of Hong Kong-listed Pacific Basin, made the case for being a public company, telling the audience: “There is a demand for quality. There is a flight to bigger companies.”
Berglund said that as a handy owner and to be large operator in minor bulks scale is important. To operate a global minor bulk business he said it was vital to have worldwide offices, a large fleet and economies of scale.
Kenneth Koo, chairman and CEO of Hong Kong private bulk company TCC Group, said that there will always be a role for family companies.
“We have learned to know our limits. We have seen so many ups and downs. We have come through it. We never look at borrowing more than 50%,” Koo said.
“Private is much better than public,” argued Vikrant Bhatia, CEO of Hong Kong bulker company KC Maritime. “Decision making is quicker and you are not having to look at your share price all the time,” he added.
John Michael Radziwill, CEO and chairman of Monaco-based GoodBulk had some simple advice for the many owners attending the by invite only gathering.
“The best route is to protect your balance sheet,” he stressed, adding: “Too much debt is greedy. Keep your balace sheet iron clad and at some time you will make some serious money.” Having a low leverage was key, he insisted.
Overall the panel was optimistic on the markets with some caveats. Radziwill said the Q4 rally has happened and the cape FFA market was no longer “boring”.
“Things are looking better,” agreed Pacific Basin’s Berglund, who reckoned slow, steady growth might avoid a rush to order new ships.
“It is absolutely insane to order new ships,” Radziwill chimed in.
TCC’s Koo, however, questioned the long term sustainability of any bulk run, suggesting that timeframes had become much shorter.
Coal was identified by KC Maritime’s Bhatia as being the big driver of rates this year.
A full report of the dry bulk session will appear in the next issue of Maritime CEO magazine.
The Maritime CEO Forum in Hong Kong was sponsored by Anglo-Eastern, Cobham, Compas, Dualog, DVB, Liberian Registry, Marlink and Transas. The next edition of the forum will be in Singapore in April 2019.